With the segment proving to be resilient amid the country's challenging retail environment due to shifting consumer behaviour and preferences for more differentiated shopping concepts, China's sportswear industry should see continued expansion over the next few years, says the Fitch Ratings.

Following the issues of store overexpansion and excess inventory having been resolved since 2012Both international and domestic brands have benefited from the expansion of China's sportswear industry which Fitch accredits to increased investment and higher sports participation.

The State Council aims to develop China's sports industry to CNY5 trillion by 2025 and increase the area available for practising sports. Greater interest in fitness and sports has also become more apparent with more people taking an interest in running, for instance that a total of 328 marathons were registered through the Chinese Athletic Association in 2016.

This attracted approximately 2.8 million participants, and representing an increase of 85 per cent compared with the previous year. Likewise, according to a news report the number of participants at private gyms across China's 70 major cities has increased by 4 to 5 million each year since 2011.

The China market is led by international brands adidas and Nike. While adidas reported over 20% constant currency growth for China in 2016, Nike also saw double digit growth in Greater China.

However, Fitch believes local brands can also benefit, since they offer consumers a competitive value-for-money proposition. For instance, local brand 361 Degrees International Limited (BB/Stable) saw over 7 per cent y-o-y same-store sales growth in 2016 and its trade-fair orders for 3Q17 achieved a high single-digit increase.

Linking their efforts to the UN Sustainable Development Goals (SDGs), as many as seventy one companies have got themselves up to the mark and put their names forward for benchmarking against their peers and competitors in the Textile Exchange Preferred Fibre & Materials (PFM) Benchmark programme.

61 per cent of companies have set targets for switching to a more sustainable source of cotton, three quarters having a specific target for organic.

Said Liesl Truscott, Materials Strategy Director for Textile Exchange, millions of people including cotton farmers, foresters and other textile feedstock providers form the base of the textile supply network and are impacted by the decisions brands and retailers make every day. Influencing improvement in fibre and material production is one of the greatest opportunities textile brands and retailers can contribute to securing a sustainable future.

Preferred is another way of saying more sustainable. Textile Exchange defines a preferred fibre or material (PFM) as one that is ecologically and socially progressive and has been selected because it has more sustainable properties in comparison to conventional options.

The mix of fibres in your product range can be just as important as the sustainability profile of each fiber,” Truscott added.

Textile Exchange recommends a portfolio approach building a suite of preferred fibre and materials from a choice of preferred options by way of the consideration of impacts and product range priorities. The goal is that PFMs are produced to a globally accepted standard, with strict criteria that qualifies the product as preferred, and can be traced through the supply chain.

One of the partnership is with the Appachi ECO-LOGIC Cotton Project in India which brings together a value chain from the farmers to the customers. The key is the partnership and working together – and we see this as pivotal for the entire industry. Seventy one companies, up from 57 last year, ranging from Adidas to Woolworths, completed a bespoke online survey and have received confidential company feedback reports revealing their individual results.An Industry report containing the combined results of all participating companies will be released this week.

Spinning mills in south India can expect stable cotton prices and supplies.
The cotton production for the 2016-17 season will probably be more than adequate to meet the demand from spinning mills. This should check a further rise in the price of cotton. Moreover international prices are expected to be benign as well thanks to a bumper crop in Australia, an 18 per cent increase in production in the US and restricted imports by China.

If cotton prices remain stable from here on, it will help contain raw material costs for a few quarters ahead. Meanwhile, higher domestic demand for textiles and garments and higher exports will improve demand for yarn.

Leading mills such as Vardhman Textiles, KPR Mills and Ambika Cotton Mills have reported double-digit year-on-year growth in sales over the past three quarters, although exports have been subdued.

And despite the high cotton prices and the challenges related to demonetization, these companies managed stable operating margins over the past three quarters in the range of 18.5 per cent to 20 per cent. Thanks to the robust performance, stocks of these firms have rallied substantially in the past year and are now trading close to the 52-week high prices.

After three days of steady business between March 15-17, 2017, new discoveries and networking amongst global industry, the world’s largest apparel fabrics and accessories trade fair for Spring/Summer closed its doors with record number of exhibitors. Nearly, 3,341 exhibitors from 26 countries and regions made the most of Intertextile Shanghai Apparel Fabric’s global platform, a 5.9 per cent increase compared to 2016 (3,155 from 27 countries).

After three days of steady business between March 15-17, 2017, new discoveries and networking amongst global industry, the world’s largest apparel fabrics and accessories trade fair for Spring/Summer closed its doors with record number of exhibitors. Nearly, 3,341 exhibitors from 26 countries and regions made the most of Intertextile Shanghai Apparel Fabric’s global platform, a 5.9 per cent increase compared to 2016 (3,155 from 27 countries). The buyer number remained steady, with around 71,000 visitors from 103 countries and regions attending (2016: 71,163 from 100 countries and regions). This included buyers from concurrent Yarn Expo, CHIC and PH Value fairs who also attended Intertextile Shanghai.

As Wendy Wen, Senior General Manager, Messe Frankfurt (HK) Ltd said, “This fair is one of the most important events for worldwide textile market, and the strong business results for exhibitors and buyers this edition once again validates this. The amount of new business that was generated here this week, as expressed by many exhibitors, was the most pleasing aspect for us. This is due in part, , to our efforts over the last few editions to improve the quality of buyers sourcing at the fair, as well as a strong focus on our product zones which target the growth areas of the market. We have also continued our work with the venue to ensure service standards continue to improve, which has provided a more conducive environment all-round for business to take place.”

Happy Exhibitors

Amongst the many exhibitors reporting strong results were two world-renowned brands returning to the fair. With long participation at Intertextile Shanghai, they managed to meet new, quality buyers in this edition. “Although we are always exhibiting here, we still see new people at the fair and can always find potential customers,” Eberhard Ganns, MD, Union Knopf (HK) Ltd, Germany, explained. “Many companies in China are growing in size as well as quality, so they are interested in our products. Around 70 per cent of people at our booth have been new and interested customers, so Intertextile Shanghai is the show to be and is an absolute must! We are telling everyone if you want to be serious in this business then you have to be here.” Ganns also said they didn’t just receive interest from Chinese buyers, who anyway have significantly increased in recent years, around 20 per cent of visitors were from overseas including Asia, Europe and the US.

Korea’s Hyundai Chemical has been participating in the Spring-Autumn editions of the fair for four years, with Youn Seok Jang, Overseas Sales Team Manager, explaining the reason for returning is Intertextile Shanghai’s ability to attract the right buyers. “We obtained over 50 business contacts from both new and existing clients over two days. A large number of contacts were domestic Chinese buyers, while buyers from the Americas and Europe also showed genuine interest in our latest products. The fair keeps getting better year after year, and we are able to connect with enough new buyers every edition to make it worthwhile for us to come back repeatedly.”

Unbeatable sourcing platform for global industry

Returning American buyer Steven Fuller, Director Men’s Woven’s, Tommy Bahama, was at the fair to source unique and innovative fabrics. “I have been to many previous editions and this is one of the most comprehensive sourcing platforms for our company to gain contacts. There is no place in the region that has these many suppliers to choose from. I met companies who develop their own fabrics, and have also had the chance to speak with the product developers, which is helpful in explaining the nature of their product. This also makes Intertextile a central meeting hub for key industry players. This edition we connected with over 20 suppliers, while having already placed orders with four of them, including from China, Korea and Taiwan. Overall, I am pleased with the fair and like every year, it is able to fulfil our sourcing needs. We will definitely be back again this October.”

Autumn edition next October

Intertextile Shanghai Apparel Fabrics-Spring Edition 2017 was co-organised by Messe Frankfurt (HK); the Sub-Council of Textile Industry, CCPIT; and the China Textile Information Centre. The next edition, Intertextile Shanghai Apparel Fabrics – Autumn Edition 2017, will take place from October 11-13.